Business interaction: The double perspective, benevolence and joined firm activity

Abstract

This paper examines the concept of joint action by introducing the construct of a 'double perspective', where a business relationship is composed of the perspectives of two firms. In the double perspective each firm looks to the self-interest of the other firm in addition to their own and also to their different collective interests. This cooperative activity requires a willingness to participate in a double perspective, where benevolence and problem solving in the other firm's interest are a strong component of interaction. Firms willing to work in the interest of the business relationship and the other firm will be more likely to achieve higher outcomes from joining operations. Relationship performance, a variable that measures the joint performance of two firms in a specific market, allows examination of past and present/future cooperation using a structural equation model. The results indicate a strong association between a firm's past experience with joint activity in other business relationships and participation in a present/future cooperative relationship and a relatively strong association of these constructs with relationship performance. In final section the theoretical and managerial implications of a firm's willingness to participate in joined activity are considered.